Miners spending: Chinese steel comeback, and other insights from the RBA

• Housing loan commitments continue to decline
• House prices continue to rise
• Large business lending is on the up, while small business loans are declining
• Inflation continues on its downtrend but is still at historic highs
• Globally, inflation is tracking down

The Reserve Bank of Australia (RBA) has today released insights into how the economy is coping in the current climate.

There are a number of considerations for investors to keep in mind, too.

Household income

Disposable income in the average Australian household has continued to fall, while the savings ratio is also trending downwards.

The household savings ratio, considered a benchmark figure for the overall resilience of the ‘average Australian,’ has reached historic lows. Despite this, consumers have surprisingly exhibited resilience in recent months.

Business lending

As analysts suggest, banks are lending less money to small businesses than they are medium and large businesses.

Large business lending continues to trend upward, suggesting that attempts to slow down consumption as a deflationary tactic aren’t hitting the top end of town.

This is good news for banks, however.

The news could suggest that discretionary retail stocks may have a harder time attracting customers.

Mining sector

Capital expenditure in the mining sector is on the way back up along with business investment overall as a share of GDP.

The RBA expects mining investment to continue an upward trajectory through to 2024.

Machinery and equipment business investments are rising slightly and shaking off the slides caused by COVID-19.

The news points towards a mining sector shaking off the pandemic-riddled times.

Chinese steel recovers from pandemic

Chinese steelmakers are recovering from the pandemic too, and output of steel from Australia’s largest trading partner is seeing an uptick.

Both steel products and crude steel are experiencing rises, with steel products the more significant category, having recovered roughly half its COVID-19 losses.

The data suggests that construction shortage issues could be starting to ameliorate.